[xorbie]

This is what I was trying to get across in that other thread, but got off on the wrong foot more often than a blind man trying to dance the waltz with his deaf wife:

Clearly, our brain is where we make decisions. Our brain is a very, very, complex piece of machinery. I believe the following things are true:

1. A very large part, and sometimes all of, a decision occurs at what we may call the "pre-conscious" level. I prefer the term "pre-conscious" here to "sub-conscious" because frequently these things become apparent to our consciousness only after the fact. Things like word choice, risk tolerance and the such are frequently assumed to be conscious but frequently are not (or at least not entirely).

2. As such, we frequently make decisions that are contrary to our consciously stated goals, even if those goals may in fact be best for us in the long run. This is because our pre-conscious decision making system is often faulty, picks up on false cues, or some factor is so overpowering that we almost cannot act otherwise (drug addiction being a powerful example).

3. I do not like to view people as neuro-chemical machines. When we are aware of our biases and take enough time, we can overcome them. We can adjust our decisions based on known biases by our "gut instincts" and we can furthermore actually reduce certain physiological symptoms/functions simply through conscious decisions (mind over matter - true story!).

As such, I think there has to be a lot more to "revealed preferences" than merely saying "actions reveal what we prefer, because what we prefer is what we do". That is a compact definition but does not really tell us much about the world, wherein it often "feels" like we do the opposite of what we had wanted and are at a loss as to why.

I think that there are two general ways people make mistakes, and it is important to clarify this difference (although both can be present in varying degrees):

1. Mistaken beliefs/information: As Borodog mentioned in the previous thread, if I believe that tap dancing through the night will cure cancer, you might find me tap dancing through the night quite frequently. This won't cure cancer. That does not mean I've acted irrationally or contrary to my preferences or anything. More subtly, our brain machinery frequently picks up on certain cues and makes certain assumptions. Teacher sees a black student is more likely to assume (pre-consciously) that this student comes from a disadvantaged situation and is more likely to put the kid into a special needs class where he chronically under performs. Is teacher being irrational? No, teacher simply has false beliefs, beliefs which teacher does not even know about! The great philosopher Slavoj Zizek refers to these things as "unknown knowns" in the tradition of the slightly less great philosopher Donald Rumsfeld.

2. Acting contrary to utility maximization: This one is obviously where things become a whole lot trickier, because utility maximization can only be known to an omniscient force to whose mind we are not privy. However, we frequently act opposed to that voice in our head. I think these voices are very real in the sense that different parts of your brain actually prefer different things, and whichever yells louder (pumps out more chemical/electric signal) "wins". It is quite clear to me that even if this is hard to formalize it is a very real effect that should not be ignored.

Fin.